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We currently live in a world filled with technology wherever we are and it’s becoming more and more integrated in our daily lives, safe to say technology companies are looking for more ways to be a part of our everyday routines. This year the top 7 most valuable global brands are technology companies or closely related to the sector [1]. Like many, I believe the tech sector is most likely to be the most valuable and profitable sector out there at the current state; this then directly applies to the stock market.

Even most of the top worldwide retailers mainly have an online presence like the Chinese brand Alibaba and the more widely known Amazon. Jeff Bezos’ company is now ranked the 7^th most valuable company on earth, it’s even being compared to the likes of Apple to see which of the two giants will soon be the first ever company to hit the $1 trillion market capital [2][3]. From just being an online bookseller to the retailer that it is now, Amazon has been on a steady ascent on the stock market. It’s also making competitors like Wal-Mart look a lot less profitable with a return of over 8000% to investor in the past 15 years [4].

Nonetheless Apple with its mere $785 billion market capital is still being called undervalued by one of the most successful investors of this century, Warren Buffet. Just like Amazon, the inventor of Macintosh has been one of the best investments anyone could’ve made years ago. It’s actually the most profitable American company to investors ever since the markets of 1926 [5]. Once again it just shows how much space the tech sector has taken up compared to other businesses considering Apple was only founded in 1976.

It may seem like the tech sector is still on the rise and it surely is, and many investors are becoming more and more curious as well as the general public who is interested in dabbling with the stock exchange; the tech market is very attractive. But history tells us that every decade a new ‘bubble’ appears, and in this day the ‘bubble’ is definitely around the tech market, the question is when will, if ever, this bubble pop? With Amazon and Apple soaring on the market charts, are they actually being overvalued? Is this bull market nearing the end of its life expectancy? [6]

I personally believe the current tech bubble we live in won’t be subject to crash in the near future as the margin for innovation is still out of our imagination and technological advancements are being developed left and right. There are just too many people with bright ideas and resources to have a market where innovation is no longer in our reach.

Sources:

Warren Buffett on Investments and Income Inequality (Full Interview). (2017, August 30). Retrieved September 26, 2017, from https://www.youtube.com/watch?v=8eu9oFvbJ1w&feature=youtu.be&t=6m27s

Sommer, J. (2017, September 22). The Best Investment Since 1926? Apple. Retrieved September 26, 2017, from https://www.nytimes.com/2017/09/22/business/apple-investment.html?rref=collection%2Fsectioncollection%2Fbusiness&_r=0

Cyran, R. (2017, February 27). Buffett’s $1 Trillion Target for Apple Is in Sight. Retrieved September 26, 2017, from https://www.nytimes.com/2017/02/27/business/dealbook/buffett-apple-trillion-dollar-valuation.html?mcubz=1&_r=0

Sharma, R. (2017, August 05). When Will the Tech Bubble Burst? Retrieved September 26, 2017, from https://www.nytimes.com/2017/08/05/opinion/sunday/when-will-the-tech-bubble-burst.html?mcubz=1&_r=0

Sommer, J. (2017, July 28). The Mind-Boggling Ascent of Amazon and Jeff Bezos. Retrieved September 26, 2017, from https://www.nytimes.com/2017/07/28/your-money/amazon-jeff-bezos.html?mcubz=1&_r=0

Pressman, A. (2017, August 09). How Apple Could Become the First $1 Trillion Company. Retrieved September 26, 2017, from http://fortune.com/2017/08/09/apple-first-trillion-dollar/

BrandZ top 100 most valuable brands 2012. (2017). [ebook] Available at: http://www.millwardbrown.com/docs/default-source/global-brandz-downloads/global/2012_BrandZ_Top100_Chart.pdf [Accessed 26 Sep. 2017].

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Competition is a vital part of business and creating an equal playing field for companies to put their products on the market. It creates an environment where the consumer has the possibility to choose between several brands carrying the same product. By getting rid of competition a monopoly can be established: in turn this ruins the will to conceive better products, the want to innovate in the field and spawns complacency.

Amazon is now by far the biggest online retailer and for good cause, it caries the widest array of products of any other website. The internet company does online retail but also groceries, cloud computing, voice activated speakers, streaming video, production studios, large scale delivery, mobile devices and many more to name [1]. And its latest deal, Whole Foods, an upscale grocery chain, has agreed to be bought out by Amazon for $13.4 billion [2]. This agreement makes Amazon even more present in our daily lives than it already was; it’s no longer just an online retailer.

Clearly Amazon has an interest in being a part of almost every sector it could sell another of its own product to consumers; and it’s even transitioning into the real world retail side of things, which could be a threat in the long run to other retailers. This brings up the issue of monopolies; the internet company could become the one and only place that buyers would go to for almost any good or service. This monopoly would mean a lack of choice for buyers as there would only be one place to get any products or services needed and would put the buyer in a losing situation as Amazon would have full control on its pricing and will to put in effort to improve products.

Hypothetically I think the only way this monopoly would ever occur is if Amazon were able to build such a strong brand loyalty mindset for its consumers that other companies would eventually go out of business.

In my opinion we should be appreciating Amazon’s efforts. It’s known that being so diverse creates a difficulty of being able to be the best in every single area as it is easier to be the best at something if it becomes your one and only focus. In my eyes Amazon is giving consumers more choices, as well adding a stronger aspect of competition to each sector they decide to integrate. This then pushes other companies to better their own products to avoid Amazon from taking over. In the end I believe what Amazon is doing is for the best of the consumer and the products being created by each and every brand it competes with, as this monopoly is unrealistic.

Sources:

• https://www.nytimes.com/interactive/2017/06/16/technology/all-things-amazon-does.html
• https://www.nytimes.com/2017/06/16/business/dealbook/amazon-whole-foods.html